Chapter 1 - Define Management Consultancy Flashcards
What are the opposing perspectives on management consultancy?
Functionalist perspective
Critical perspective
Explain the functionalist perspective on management consultancy.
Create value for their clients by advising managers on how to improve the functions in their organisations.
Explain the critical perspective.
Critical of the knowledge, techniques and results of management consultants.
List the characteristics of management consultants?
Service Direct at managers Is about decisions It is knowledge intensive labour Independence Is a business FT or PT
Management Consultancy as a service.
A service is intangible and hard to measure
Some consultancy projects are measurable such as cost reductions
The only tangible outputs are reports and PowerPoints
What is a contingent project?
Where the fee for the service are directly related to the achieved results
Can management consultancy be scaled up?
Management consultancy is very labour intensive but with the use of software labour can be saved and a high quality service is still provided
Why is Management consultancy is directed at managers.
Managers are responsible for organising their relevant department or teams and they distribute the advice received from management consultants
Management consultancy is about decisions.
Management is about decisions regarding business effectiveness.
Management consultancy is knowledge intensive
To solve business problems requires intellectual capacity
Management consultancy is about independence
Management consultants are independent from their clients in order to provide impartial advice.
Management consultancy is a business.
A management consultant is a business transaction between the client and the consultant.
Management consultancy is about projects
Consultants are demanded for a limited period of time
Consultants have to provide particular deliverables
Projects are temporary however relationships are long-term as repeat business and good reference is important for consultants
What type of clients are consultants main clients?
Repeat business/existing clients
This saves search costs for clients
Is there one definition for management consulting?
There is no consensus around the definition for management consulting
What is the synthesized definition of management consulting?
To provide assistance to managers (e.g. identify problems and opportunities)
To outline solutions to problems and opportunities
What is the difference between strategic and operational level decisions?
Strategic level - improving long-term performance of the client organisation as a whole (whole business environment)
Operational level - improving the performance of operational activities over a shorter term
What is a narrow definition of management consulting?
Management consultants give advice to their clients
What is the broader definition?
Next step after giving advice is to implement the solution
A broader definitions includes advice giving and implementation
Providing assistance with the management’s task of implementation
What is the difference between management consultancy and business consultancy?
Management consultancy has the narrow and broad definition
Business consultancy - advice to management on non-management tasks of implementing management decisions
What is business consultancy
It is helping the processes within a department or team
Assisting on non-managerial tasks
What is the difference between consultancy and business services?
Business service involves no advice
Consultancy involves advice to managers and to implementation
And advice to non-managerial tasks on implementation
Key difference is advice
What is the criteria for the management consultancy definition?
Advice on management decisions
Decision on business problem
Assistance with management on implementation tasks
Independent of client management
What are the formal roles of management consultants?
Expert
Doctor
Facilitator
What are the informal roles of management consultants?
Hired hand
Legitimator
Political weapon
Scapegoat
Management consultant as experts.
Clients know or think they know the opportunity or problem
They purchase the expertise from the consultant to help assist the decision process
What is knowledge brokering?
Consultants broker knowledge from best practice
Within an industry - from industry best practice to less established firm
Across industry - may take best practice or business model in one industry and apply it to another industry
Is there a conflict of interest with knowledge brokering? How can you prevent this?
Yes you could give away a competitive strategy
Consultants set up “Chinese walls” to prevent the leak of sensitive information
Policy of having one client per industry
Consultants as doctors?
Clients think they have a problem or opportunity but only have a vague idea of what it might be
Diagnose and solve the clients problems
What is the faciliatory role? How is it different?
Doctor and expert are forms of content consultation
Facilitator helps the client do it themselves it is a process consultation
Hired hands.
Client is understaffed and needs some assistance with management decisions
Not necessarily a problem or opportunity
Legitimators.
Give legitimacy (rubber stamp) a solution
Clients may need a legitimator if some stakeholders are unhappy about a future plan
Acceptance of a plan can be increased by the hiring of prestigious consultants
Political weapons.
May provide arguments or case to be used for internal (factions/departments etc) or external (governments, firms etc) agents.
Scapegoats.
A company may want to make an unpopular decision (lay off workers) but do not want to deal with the backlash
The hire consultants to do their dirty work and keep their hands clean
The management consultants are seen to take most of the blame
Similar to footballers and transfer requests (they want it to seem that the player wants out)
Should management consultants accept informal roles?
It is tempting to accept informal roles but this could lead to a vicious circle
Accepting informal roles could lead to reputational damage leading to less formal roles
With no formal roles clients your formal reputation is damaged and clients do not want to accept you even for informal roles
What are the divisions of responsibility for a consultant? What can this responsibilities tell us about a consultant?
- Identify the problem (opportunity)
- Diagnose
- Develop one or more solutions
- Making a decision
- Implementing a decision
Tells you the role the consultant will play
Management substitute.
Management consultants take on al 5 sub-processes of responsibility
Bogus consultancy.
The client takes all the responsibilities and does not let the management consultant have any sub-processes
How to external and internal consultants differ?
Knowledge
Relation to client
Reputation
Cost
Characteristics of a profession?
The business activity is accompanied by formal, legally enforced institution that protects the interests of the public and the professionals involved
Designs qualification standards
Monitors and controls the activities of members when necessary taking sanctions
Key components of a profession?
Accepted authoritative body of knowledge and skills
Code of conduct
What are the advantages of professional standards?
Layer of accountability
Protect clients against consultants
Reduce uncertainty for clients
How are clients’ interests protected?
Unlike doctors or lawyers there is no legal protection against bad consultancy
Instead a clients reputation is the single most important aspect
Why is management consultancy not a legally enforced profession?
Evaluation difficulties - Difficulty in assessing the cause effect relationship (Almost impossible to evaluate)
Domain ambiguity - the body of knowledge for management consultants is so diffuse that common standards of knowledge are difficult
Diverging interests - form of market failure if standards subject above and below average consultants to same standards. Top consultancies do not need public standards as they have a free market private standard that gives them legitimacy (e.g. their brand and reputation)
